P45:-Southern Store Ltd. Is a retail store operating two departments. The company maintains a memorandum stock account and memorandum mark up account for each of the departments. Supplies issued to the departments are debited to the memorandum stock account of the department at cost plus the mark up and departmental sales are credited to this account. The mark up on supplies issued to the departments is credited to the mark up account for the department. When it is necessary to reduce the selling price below the normal selling price i.e. cost plus mark up, the reduction (mark down) is entered in the memorandum stock account and in the mark up account. Department Y has a mark up of 33% on cost and Department Z 50% on cost. Following information has been extracted from the records of Southern Stores Ltd. For the year ended 31st March, 2015. Department Y Department Z Stock on 1-4-2014 at cost 24,000 36,000 Purchases 1,62,000 1,90,000 Sales 2,10,000 2,85,000 (1) The stock of Department Y at 1st April, 2014 includes goods on which the selling price has been marked down by $ 510. These goods were sold in April, 2014 at the reduced price. Certain goods purchased in 2014-15 for $ 2,700 for department Y, were transferred during the year to department Z, and sold for $ 4,050. Purchase and sale are recorded in the purchases of department Y and the sales of department Z respectively, but no entries in respect of the transfer have been made. Goods purchased in 2014-15 were marked down as follows: (1) (I) Department Y Department Z 8,000 21,000 Cost Mark down 800 4,100 At the end of the year there were some items in the stock of the department Z, which had been marked down to $ 2,300. With this exception all goods were marked down in 2014-15 were sold during the year at the reduced prices. (IV) During stock taking at 31st March, 2015 goods which had cost $ 240 were found to be missing in department Y. It was determined that the loss should be regarded as irrecoverable. The closing stock in both departments are to be valued at cost for the purpose of the annual accounts. (V) You are required to prepare for each department for the year ended 31st March, 2015: (a) Trading Account (b) Memorandum Stock Account, and (c) Memorandum Mark up Account.

P45:-Southern Store Ltd. Is a retail store operating two departments. The company maintains a memorandum stock account and memorandum mark up account for each of the departments. Supplies issued to the departments are debited to the memorandum stock account of the department at cost plus the mark up and departmental sales are credited to this account. The mark up on supplies issued to the departments is credited to the mark up account for the department. When it is necessary to reduce the selling price below the normal selling price i.e. cost plus mark up, the reduction (mark down) is entered in the memorandum stock account and in the mark up account. Department Y has a mark up of 33% on cost and Department Z 50% on cost. Following information has been extracted from the records of Southern Stores Ltd. For the year ended 31st March, 2015. Department Y Department Z Stock on 1-4-2014 at cost 24,000 36,000 Purchases 1,62,000 1,90,000 Sales 2,10,000 2,85,000 (1) The stock of Department Y at 1st April, 2014 includes goods on which the selling price has been marked down by $ 510. These goods were sold in April, 2014 at the reduced price. Certain goods purchased in 2014-15 for $ 2,700 for department Y, were transferred during the year to department Z, and sold for $ 4,050. Purchase and sale are recorded in the purchases of department Y and the sales of department Z respectively, but no entries in respect of the transfer have been made. Goods purchased in 2014-15 were marked down as follows: (1) (I) Department Y Department Z 8,000 21,000 Cost Mark down 800 4,100 At the end of the year there were some items in the stock of the department Z, which had been marked down to $ 2,300. With this exception all goods were marked down in 2014-15 were sold during the year at the reduced prices. (IV) During stock taking at 31st March, 2015 goods which had cost $ 240 were found to be missing in department Y. It was determined that the loss should be regarded as irrecoverable. The closing stock in both departments are to be valued at cost for the purpose of the annual accounts. (V) You are required to prepare for each department for the year ended 31st March, 2015: (a) Trading Account (b) Memorandum Stock Account, and (c) Memorandum Mark up Account.

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

ChapterE: Departmental Accounting

Section: Chapter Questions

Problem 1P: Bay Book and Software has two sales departments: Book and Software. After recording and posting all...

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